Calls for a monitoring mechanism for the EPF

The Ceylon Federation of Labour (CFL) has expressed concern on the future viability of the Employees Provident Fund (EPF) if the government continues to ‘fiddle‘with the hard earned savings of workers to bolster the Colombo Stock Market.

CFL President T.M.R. Rasseedin said in a statement that in recent times because of the government's own doings the Colombo bourse dipped to an all time low in transactions and the Government has rescued it from the doldrums by taking easy recourse of using EPF monies to artificially prop up the stock market.

According to its 2010 Report the EPF, has increased its investment in the Colombo Stock Market to Rs 43.7 billion in 2010 from Rs. 9.8 billion in 2009, the highest-ever increase in investment in equities recorded so far. It is a 400% increase in equity investment which is above the permissible limit, the statement said. "We demand the authorities to publish details of investments made in listed and unlisted equities so that the public would know whether the Government has helped out its business cronies by purchasing their shares far above the real value," Mr Raseedin was quoted as saying.
The statement said that the Government must realise that the monies in the EPF belong to workers and not to the Central Bank or the Monetary Board and they cannot be permitted to gamble with the savings of workers.

To ensure prudent investment of these funds that the unions proposed the setting up of a Tripartite Consultative Committee in the draft EPF Amendment Act. The proposal was accepted and the amendment was in fact drafted with the express provision that "The committee shall be charged with the functions of discussing and exchanging views with the Central Bank and the Monetary Board in matters relating to the appropriation and investment of the monies lying to the credit of the fund and other functions as may be prescribed by the Minister for the purposes of this Act."

Strangely this provision has been omitted from the amendment of the EPF Act that was passed recently. The CFL urged the authorities to set up a mechanism that would enable representatives of workers and employers to oversee and monitor the operations of the Fund. "We call upon all trade unions to agitate for such a mechanism as the actions of the fund managers are increasingly becoming unacceptable and threaten the future viability of the fund," the CFL said.